The WA government has extended the deadline for when construction must start on new homes bought with the Building Bonus grant.
In June, the government of Western Australia revealed its $147-million Building Bonus program, which provides $20,000 grants to WA home buyers that want to build a new house or purchase a new detached property (prior to completion of construction).
The grant – which WA home buyers can access in addition to the $25,000 federal government HomeBuilder scheme and the $10,000 First Home Owner Grant (where eligible) – is available to applicants who enter into an eligible contract between 4 June and 31 December 2020.
The scheme initially required construction to commence on the new property (e.g. site excavation works) within six months of the contract being signed.
However, due to the high demand for the grant (and home construction generally), industry and home buyers had expressed concerns that six months was not enough time to commence construction.
As such, the WA government has now extended the commencement deadline by six months, meaning that construction must start within 12 months of contracts being signed.
The state government said it hopes the extension will give more Western Australians the opportunity to access the “highly successful” Building Bonus program, by giving home builders more time to commence site works to qualify for the $20,000 grant.
According to the government, there had been nearly 300 applicants submitted for the grants as at 15 September – with approximately $1.92 million in grants paid out to 96 applicants.
Moreover, land sales had increased significantly in the state, rising from a historical average of 60 per week to a peak of 500 sales per week in late June.
The McGowan government added that the extension of the construction period would ensure the pipeline of construction work generated as a result of the program will continue through to 2022, which could create “hundreds of additional jobs”.
Premier Mark McGowan commented: “More Western Australians will now have the chance to access a $20,000 grant to build their own home, creating hundreds more WA jobs.
“Reports from the building industry confirm the grants have been a crucial driver of jobs and activity, and the industry is now thriving as a result.
“This extension of the construction period will allow that work to continue, creating a pipeline of construction work that will continue all the way through to 2022, providing certainty to the whole industry.”
He concluded: “The program has been an overwhelming success, with many Western Australians taking the opportunity to access the $20,000 grant to assist them to build their own home.”
Treasurer Ben Wyatt also commented, stating: “The Building Bonus has been so successful and created so much activity in the building industry that six months is simply not long enough for many people to commence building their new home.
“We’ve closely monitored the progress of the program and this adjustment will give many potential home builders additional time to ensure they can access the grant.”
He concluded: “It will ensure all of the jobs created as a result of this important stimulus measure will continue through to 2022, delivering a major boost to the economy...
“The extension of the construction period will allow Western Australians to work on more projects in both the civil and residential construction sectors over the coming years.”
The Western Australia arm of building and construction industry association Master Builders Australia welcomed the move, with executive director John Gelavis noting that it was “critically important” as the industry was about to enter into one of its busiest periods.
According to Mr Gelavis, the surge is a result of the $27.1 billion infrastructure and capital works program announced at the state budget as well as the spike in home building work commencing in the next few months.
However, he noted that the housing industry in WA had declined more than 60 per cent since 2014, dropping to “disastrous levels” as the mining boom dropped off. As such, he said the package had “rescued many businesses such as mum and dad builders, large builders, subbies, manufacturers, suppliers and apprentices and will keep thousands of people in work and thousands of West Australian families financially secure”.
“This extension will ease pressure on the construction time frame, which will allow the industry to build the highest quality homes in the safest possible way,” Mr Gelavis said.
“After we pitched the idea to government in March this year, we were delighted to see how successful the Building Bonus program became in creating a pipeline of work for the industry.
“However, our members raised concerns around safety and the availability of subbies due to the tight time frame, so we are glad the Premier has listened to our calls for an extension and acted.”
“We now have a need for speed from many of the support agencies to make this truly successful, including local governments to ensure building and planning approvals, land titling and finance applications are dealt with quickly,” he said.
Mr Gelavis concluded: “A strong building industry means a strong WA.”